Accounting, Auditing, and Bookkeeping Services - Global Outlook

Global Industry Analysts, Inc, January 2012, Pages: 160

The global outlook series on Accounting, Auditing, and Bookkeeping Services provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report analyzes the growth drivers, market challenges, and reviews global and regional trends across various segments. Market discussions in the report are amply illustrated with 31 fact-rich market data tables, charts, and graphs.

Regional markets briefly abstracted include the United States, Canada, Japan, Belgium, Germany, Italy, Norway, Russia, Sweden, the United Kingdom, Australia, China, Hong Kong, India, Argentina, Brazil, Mexico, and United Arab Emirates. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of 362 companies worldwide.

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ACCOUNTING, AUDITING, AND BOOKKEEPING SERVICES

A GLOBAL OUTLOOK, JANUARY 2012

CONTENTS

1. OVERVIEW 1
Introduction 1
Key Statistics 2
Table 1: World Recent Past, Current and Future Analysis for
Accounting, Auditing and Book Keeping Services Market by
Geographic Region - US, Europe, Asia- Pacific (including
Japan) and Rest of World Markets Independently Analyzed
with Annual Revenues in US$ Million for the Years 2010
through 2015 2

Table 2: World 5-Year Perspective for Accounting, Auditing
and Book Keeping Services by Geographic Region - Percentage
Breakdown of Dollar Revenues for US, Europe, Asia-Pacific
(including Japan) and Rest of World Markets for Years 2011
& 2015 3

Table 3: World Recent Past, Current and Future Analysis for
Accounting, Auditing and Book Keeping Services Market by
Service Segments - Book Keeping Services, Auditing Services,
Payroll Services, Tax Return Services and Others
Independently Analyzed with Annual Revenues in US$ Million
for the Years 2010 through 2015 4

Table 4: World 5-Year Perspective for Accounting, Auditing
and Book Keeping Services by Service Segments - Percentage
Breakdown of Dollar Revenues for Book- Keeping Services,
Auditing Services, Payroll Services, Tax Return Services
and Others for Years 2011 & 2015 5
History and Growth 5
Organizational Structure 6
Regulations and Standards 7
A Review of Big Four Auditors 8
How the Crisis Affected the Revenues of Accounting Firms in 2009 9
Deloitte Touche Tohmatsu 9
Ernst & Young International 9
KPMG International 10
PricewaterhouseCoopers 10
Table 5: Leading Players in Global Accounting, Auditing
Services Market FY2011): Revenues in US$ Billion for Big
Four Auditors - PricewaterhouseCoppers, Deloitte, Ernst &
Young, and KPMG 11
Leading Players in Global Accounting, Auditing Services
Market (FY2011): Head Quarters, Year of Incorporation,
and Employee Strength for Big Four Auditors-
PricewaterhouseCoopers, Deloitte, Ernst & Young, and
KPMG 11
Table 6: Leading Players in the Global Accounting, Auditing
Services Market (2010): Percentage Market Share by Company
- PwC, Deloitte, Ernst & Young, KPMG, and Others 12
Mergers & Acquisitions and Firm Additions of the Big Four
Accounting Firms Updated to 2010 12
Table 7: Leading Mid Tier Accounting Firms in the Global
Market (2010): Revenues in US$ Millions for BDO
International, RSM International, Grant Thornton
International, and Baker Tilly International 13
Top Five Global Accounting Associations (2010): Ranked on
the Basis of Revenue 13
Small and Medium Enterprises - Key Customers 13
Competence and Professionalism 14
Enhanced Value and Role of Internal Auditors In the Current
Environment 14
Global Financial and Accounting Outsourcing Space Evolves Over
Time 15
Technology Trends to Look Forward to 15
Peek into Financial Accounting Applications 15
Factors in Favor of Future Growth 16
Influential Developments 16
Multibook Accounting Capabilities 16
Mashups 17
Table 8: Global Accounting Services Market (2010):
Percentage Breakdown of Overall Fee Split by Category -
Audit & Accounting, Tax, Management Consulting, and Others 17

2. THE SEGMENTS 18
Accountancy 18
Introduction 18
Table 9: Top Professional Accountancy Associations Globally
with Membership Details as at 2009 18
Modern Accounting 19
History 19
Audit 20
Introduction 20
Audit Types 20
Quality Audit 20
Integrated Audit 20
Classifications of Auditors 21
Internal Auditors 21
External Auditors 21
The International Auditing and Assurance Standard Board 21
Bookkeeping 21
Introduction 21
Bookkeeper 21
Bookkeeping Types 22
Footing and Cross Footing 22
Computerized Bookkeeping 22
Online Bookkeeping 22
Methods of Bookkeeping 22
Single Entry Bookkeeping 22
Double-Entry Bookkeeping 22

3. TRENDS & ISSUES 23
Firms Continue to Rely on Strategic Alliances and Specialized
Services 23
Recession Has its Impact Felt 23
Popular Trends in 2010 Include 23
Enhanced Role of Financial Professionals Post Recession 23
Accounting Firms Strategize to Weather the Storm 24
Accounting Services - A Future Outlook 24
Accountants Take Up the Fixed Fee Pricing Structure Post
Recession 25
New Jobs in the US Accounting and Book Keeping Industry Usher
in Recovery 25
Large Public Company Audit Market Highly Concentrated 25
Competition for the Big Four 26
Emerging Asian Countries - Attractive Markets for Mid-Tier
Accounting Firms 26
Small Accounting Firms Take to Cloud Computing 26
Demand for Client Services Impels Knowledge Management Programs 27
Paperless Workflows - A Key Growth Strategy 27
Firms Provide Flexible Work Environments to Offset Resource
Constraints 27
Outsourcing of Finance and Accounting Solutions Continues to
Surge 27
Regulations: The Rationale Behind Accounting and Auditing
Industry 28

4. MERGERS & ACQUISITIONS 29

5. STRATEGIC CORPORATE DEVELOPMENTS 60

6. SERVICE/ PRODUCT LAUNCHES 64

A REGIONAL MARKET PERSPECTIVE 71

1. THE UNITED STATES 71
Overview 71
Table 10: US Recent Past, Current and Future Analysis for
Accounting, Auditing and Book Keeping Services Market by
Service Segment - Book Keeping Services, Auditing Services,
Payroll Services, Tax Return Services and Others
Independently Analyzed with Annual Revenues in US$ Million
for the Years 2010 through 2015 72

Table 11: US 5-Year Perspective for Accounting, Auditing and
Book Keeping Services by Service Segment - Percentage
Breakdown of Dollar Revenues for Book Keeping Services,
Auditing Services, Payroll Services, Tax Return Services and
Others for Years 2011 & 2015 73

Table 12: Leading Players in the US Accounting, Auditing
Services Market (2010): Percentage Market Share by Company -
Deloitte & Touche USA, Ernst & Young, PricewaterhouseCoopers,
KPMG, and Others 73
Resilient Growth Despite Economic Slowdown 74
Impelling Factors 74
Challenges Ahead 74
Trends & Issues 75
CPAs Prepare for International Accounting Standards 75
The Slowdown and Strict Regulations have a Bearing on the US
Tax Accounting Industry 75
Economic Slowdown Induces Growth of Forensic Accounting 76
Uncertain Economy Poses Formidable Challenges to Accountants 76
Consultation Services Overtake Auditing Services 76

2. CANADA 77
Overview 77
Table 13: Leading Players in Canadian Accounting, Auditing
Services Market (2010): Percentage Market Share by Company -
Deloitte & Touche, KPMG, PricewaterhouseCoopers, Ernst &
Young, and Others 77
Canadian Auditing Industry 78
Quick look into Multilateral Instrument 52-111 78
Impending Factors 78
The CGA Canada Looks Forward to Removal of Certain Impositions 79

3. JAPAN 79
Overview 79

4. EUROPE 80
European Finance and Accounting Outsourcing - An Overview 80
Positive Growth for Accounting and Auditing Firms 80
Table 14: European Recent Past, Current and Future Analysis
for Accounting, Auditing and Book Keeping Services Market by
Geographic Region - France, Germany, Italy, UK and Rest of
Europe Markets Independently Analyzed with Annual Revenues in
US$ Million for the Years 2010 through 2015 81

Table 15: European 5-Year Perspective for Accounting,
Auditing and Book Keeping Services by Geographic Region -
Percentage Breakdown of Dollar Revenues for France, Germany,
Italy, UK and Rest of Europe Markets for Years 2011 & 2015 82

Table 16: European Recent Past, Current and Future Analysis
for Accounting, Auditing and Book Keeping Services Market by
Service Segment - Book Keeping Services, Auditing Services,
Payroll Services, Tax Return Services and Others
Independently Analyzed with Annual Revenues in US$ Million
for the Years 2010 through 2015 83

Table 17: European 5-Year Perspective for Accounting,
Auditing and Book Keeping Services by Service Segment -
Percentage Breakdown of Dollar Revenues for Book Keeping
Services, Auditing Services, Payroll Services, Tax Return
Services and Others Markets for Years 2011 & 2015 84

Table 18: Leading Accounting and Auditing Companies in the
European Market (2009): Percentage Market Share for PwC
International, KPMG International, Ernst & Young, Deloitte,
and Others 84
New Regulations Increase Demand for Accounting Services in
Europe 85
Advancement of the Process of Accounting Standards
Harmonization in Europe 85
The Battle among the ‘Big Four' Continues But are The Smaller
Audit Firms Ready Yet 86

4a. BELGIUM 87
Overview 87
The Legal Framework of Belgium 87

4b. ESTONIA 88
An Overview of the Estonian Auditing Market 88
Table 19: Estonian Auditing Market (2009): Percentage Share
Breakdown by Enterprise Categories - Large Scale Enterprises
(PWC, KPMG and E&Y), Major Medium Scale Enterprises (Deloitte
and Rimesse) and Minor Medium Scale Enterprises (BDO, PKF,
HLB, KMRA, ELSS) 88

4c. GERMANY 89
German F&A Market - An Overview 89
Table 20: German Current and Future Analysis for Accounting,
Auditing and Book Keeping Services Market - Annual Revenues
in US$ Million for the Years 2010 through 2015 89

Table 21: Leading Players in the German Accounting, Auditing
Services Market (2009): Percentage Market Share by Company -
PwC, KPMG, Ernst & Young, Deloitte Touche Tohmatsu, and
Others 89
Consolidations on the Rise in the German Market 90
F&A Outsourcing in Germany - A Brief 90
Table 22: German Accounting Services Market (2010):
Percentage Breakdown of Overall Fee Split by Category - Audit
& accounting, Tax, Management Consulting, and Others 90

4d. ITALY 91
Italian F&A Market Exhibiting Tremendous Growth Despite
Economic Instability 91
Table 23: Italian Current and Future Analysis for Accounting,
Auditing and Book Keeping Services Market - Annual Revenues
in US$ Million for the Years 2010 through 2015 91

Table 24: Leading Players in the Italian Accounting, Auditing
Services Market (2009): Percentage Market Share by Company -
KPMG Italia, PwC Italy, Ernst & Young, Deloitte, and Others 92

Table 25: Italian Accounting Services Market (2009):
Percentage Breakdown of Overall Fee Split by Category - Audit
& Accounting, Tax, Management Consulting, and Others 92

4e. NORWAY 93
Norwegian Accounting & Auditing Market 93

4f. RUSSIA 93
Russian Audit Industry - Overview 93

4g. SWEDEN 94
Market Overview 94

4h. THE UNITED KINGDOM 95
Overview 95
Accounting Market in the UK 95
Table 26: UK Current and Future Analysis for Accounting,
Auditing and Book Keeping Services Market - Annual Revenues
in US$ Million for the Years 2010 through 2015 96
High Concentration in the Audit Market Raises Flux 96
Audit Revenue Once Again on the Growth Path 97
FAO - An Upcoming Market in the United Kingdom 97
Top 20 UK Accounting Firms Ranked on the Basis of Revenues
for 2010 98

5. ASIA PACIFIC 99
Key Statistics 99
Table 27: Asia-Pacific Current and Future Analysis for
Accounting, Audting and Book Keeping Services Market Analyzed
by Annual Revenues in US$ Millions for Years 2010 through
2015 99

5a. AUSTRALIA 100
Australia - A Favorable Economy for SMEs 100
Additional Advisory Services Witness Decline In Demand in
Australia 100
Small Firms Serve Small Public Companies 101

5b. CHINA 102
Chinese Market On a Consolidation Spree 102
Leading Chinese Accounting Firms Ranked on the Basis of
Annual Revenues (2010) 103
Leading Chinese Networks and Associations of Independent
Accounting Firms 103
Table 28: Leading Players in the Chinese Accounting, Auditing
Services Market (2009): Percentage Market Share by Company -
PricewaterhouseCoopers, Deloitte & Touche, Ernst & Young,
KPMG, and Others 104
Industry Impediments 104
Table 29: Chinese Accounting Services Market (2009):
Percentage Breakdown of Mid-Tier Fee Split by Category -
Audit & Accounting, Tax, Management Consulting, and Others 105

5c. HONG KONG 106
Overview 106
Relationships with China - The Accounting Services Market 106

5d. INDIA 107
Overview 107
Transitory Turbulence 107
Long term Challenge 107
Migration to IFRS: Opportunity to influence Global Standards 107
Financial Services Market in India - Impact of Recession 108
European Business Opportunities for Indian Accountants 108
Small and Medium Sized Audit Firms in India On a Capacity
Building Initiative 108
Indian Subsidiaries of Global Accountancy Firms 109
The Limited Liabilities Partnership Act - A Boon for Smaller
Auditors in India 109

5e. MALAYSIA 110
Big Four Dominance Thinning Down in Malaysia 110

5f. TAIWAN 110
Taiwan Accounting Services Sector - An Overview 110

6. LATIN AMERICA 111
Latin America to Emerge as a Potential Market for Accounting
Services 111

6a. ARGENTINA 111
An Overview of Accounting Services Market in Argentina 111
Table 30: Argentinean Accounting Services Market (2011E):
Percentage Breakdown of Overall Fee Split by Category - Audit
& Accounting, Tax, Management Consulting, and Others 111

6b. BRAZIL 112
Overview 112
Audit Market 112
Congenial Regulatory and Legal Framework 112

6c. MEXICO 113
Overview 113
The Evolution of Bank Accounting Standards 113

7. THE MIDDLE EAST 115

7a. UNITED ARAB EMIRATES 115
Overview 115
Stumble Stones in the Market 115
Table 31: Accounting Services Market in theUAE (2011E):
Percentage Breakdown of Overall Fee Split by Category - Audit
& Accounting, Tax, Management Consulting, and Others 116

GLOBAL DIRECTORY

Businesses during the crisis period were confronted with increasing receivables and slow collections, and with most of them reporting decreased tax season revenues, accounting, auditing and bookkeeping firms serving such companies were the worst hit. Even those accounting firms which remained strong for a certain amount of time slowly succumbed to the worst economic climate. Nevertheless, the recession induced certain positive changes in the market, foremost among them being the accelerated trend of financial professionals donning more responsible positions in the organizations they serve. Accounting, auditing and bookkeeping service providers are portraying a more active role as trusted advisers as the market comes out of the recessionary impact. Accountancy in most of the client organizations now supervises top management in all monetary aspects related to business running. Moving forwards, the traditional accounting and financial services is going to evolve into a more mature profession specializing in niche areas such as high-level diagnosis and high level guidance and advisory. During the crisis, accounting firms also spent more time with existing clients and tried developing innovative solutions for better serving their needs rather than scouting for new clients. Increased automation significantly reduced the time taken for the routine accounting jobs, forcing accounting professionals to expand scope of work

PwC retained the top spot among the Big Four, followed by Deloitte, E&Y and KPMG. After witnessing a subdued performance in 2009, the Big Four companies inched ahead in 2010. The firms utilized the time period for building a strong platform to serve the increased client demand they anticipated post crisis. The companies invested in building markets, strengthening global strategies and in training people instead. Smaller companies on the other hand sought opportunities to grab smaller and mid-sized clients from the Big Four.

Region wise, the slowdown and stricter regulatory environment continue to have a bearing on US tax accountancy industry. The American Recovery and Reinvestment Act of the year 2009 brought in an era of tax cuts reducing demand for services of tax accounting professionals in the US. On the contrary, in Europe, implementation of new regulations has been the major growth driver for the accounting services market. Germany and the United Kingdom are the two major countries in Europe which are witnessing a rapid growth in their offshore accounting services markets, mainly because of a shortage of labor and also price pressures. Segment-wise, in the global market, services that are in high demand currently are internal audit, risk management and due diligence, while IPO and corporate finance are still in a lull. The service segment of cross-border tax advice demonstrated consistent growth. The International Accounting Standards are being rapidly adopted in several countries. Around 120 countries have permissions for IFRS implementation for the present.

© Global Industry Analysts, Inc., USA

- PricewaterhouseCoopers

- Deloitte

- Ernst & Young

- KPMG

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